BILL ANALYSIS
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THIRD READING
Bill No: SCR 90
Author: Lowenthal (D)
Amended: 5/24/10
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 5-3, 6/15/10
AYES: Lowenthal, DeSaulnier, Kehoe, Pavley, Simitian
NOES: Huff, Ashburn, Harman
NO VOTE RECORDED: Oropeza
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Internet service accessibility in affordable
housing
SOURCE : One Economy Corporation
DIGEST : This resolution encourages state and local
multifamily housing lending agencies to align their
policies on the provision of free Internet access with
those of the Tax Credit Allocation.
ANALYSIS : Current law establishes the Tax Credit
Allocation Committee (TCAC) to administer the federal and
state Low-Income Housing Tax Credit Programs. Through a
highly competitive application process, TCAC awards tax
credits to the developers of affordable rental housing. In
turn, these developers take on investors as limited
liability partners, who in exchange for the tax credits
provide funds in the form of equity for building the
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affordable housing.
In 2003, TCAC amended its scoring regulations to encourage
affordable housing developers to provide broadband Internet
access as a service amenity to their tenants. The current
regulations provide two points within the site amenity
category for providing high-speed Internet service to each
unit for a minimum of 10 years, free of charge to the
tenants. As a practical matter, TCAC considers the
infrastructure design and installation costs associated
with the Internet network as eligible development costs
that can be included when calculating the amount of tax
credits the development is eligible for. The on-going
costs of network maintenance and the internet service
itself are also eligible operating costs.
The Department of Housing and Community Development (HCD)
administers a number of programs that finance the
development of affordable rental housing, including the
Multifamily Housing Program, the Joe Serna, Jr. Farmworker
Housing Grant Program, and others. HCD's regulations are
not specific to the issue of internet-related costs, but
its practice is to allow the costs of the design and
installation as eligible development costs but not to allow
the on-going costs of maintaining a high-speed internet
network and providing free internet service to residents as
an eligible operating cost.
Many counties and cities also provide financing for the
development of affordable rental housing. Counties and
cities primarily use redevelopment resources from the 20%
low- and moderate-income housing fund and federal funds
from the HOME Program and the Community Development Block
Grant Program for these purposes. Counties and cities
establish their own policies with respect to allowing
internet hardware and soft costs as eligible expenditures,
and these policies vary widely.
This resolution:
1. Encourages all state and local affordable housing
lenders who administer competitive multifamily housing
programs to follow the California Tax Credit Allocation
Committee policy on high-speed Internet access by
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providing competitive points for developments that will
provide high-speed Internet service to each unit for a
minimum of 10 years, free of charge to the tenants.
2. Encourages all state and local affordable housing
lenders to recognize both the costs for installing
high-speed Internet network infrastructure as an
eligible development cost and the costs of ongoing
Internet service and network maintenance costs as
eligible operating costs.
Comments
According to the author's office, persons without Internet
access and training will find it difficult to compete in
the increasingly technology-driven, knowledge-based
economy. Low-income households are significantly less
likely to have a computer, Internet access, or home
broadband service and are therefore at risk of falling
further behind.
Since 2003, California has recognized the importance of
Internet service for low-income residents of affordable
housing. Through its Low Income Housing Tax Credit
program, TCAC encourages affordable housing developers to
use housing credit funding to provide broadband as an
amenity in affordable housing units. As a result of this
policy, the nonprofit One Economy Corporation has assisted
283 affordable housing developments in California design
and install data network infrastructure, and the residents
of 16,949 affordable housing units in California enjoy
free, in-home Internet service as a basic service amenity.
Other state and many local public lenders do not encourage
the provision of free Internet access in the same way, if
at all. In order to enhance the educational and economic
opportunities of low-income households, this resolution
seeks to encourage state and local multifamily housing
lending agencies to align their Internet policies with
TCAC's policies.
FISCAL EFFECT : Fiscal Com.: Yes
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SUPPORT : (Verified 6/30/10)
One Economy Corporation (source)
California Rural Legal Assistance Foundation
Western Center on Law and Poverty
JJA:do 6/30/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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